Categories

Pages

EU slaps record $5 bn fine on Google, Pichai plans to appeal

Accusing Google of illegally using Android mobile devices to strengthen dominance of its search engine, the European Commission on Wednesday imposed a record fine of 4.34 billion euros ($5 billion) on the tech giant, which said it would appeal against the decision.

According to the Commission, Google has imposed since 2011 illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general Internet search. Google must now bring the conduct effectively to an end within 90 days or face additional penalty, the ruling said.

Reacting to the ruling, Google CEO Sundar Pichai said the company will appeal against the Commission’s decision.

“Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition. Android has enabled this and created more choice for everyone, not less. This is why we intend to appeal today’s Android decision,” Pichai wrote in a blog post immediately after the verdict. The decision, according to the Google CEO, ignores the fact that Android phones compete with iOS phones.

According to Commissioner Margrethe Vestager who is in charge of competition policy, their case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine.

In particular, Google has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google’s app store (the Play Store). The company made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.

The Commission also found that Google prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google.

The Commission’s decision, according to Google CEO Sundar Pichai, sends a troubling signal in favour of proprietary systems over open platforms. Pichai said the company has always agreed that with size comes responsibility.